November 1, 2018

U.S. EPA Seeks Comment on Rollback of New Source Methane Standards

Energy Alert
(by Michael H. Winek, Meredith Odato Graham and Gary E. Steinbauer)
In 2016, U.S. EPA finalized a rule that established first-time federal standards for methane emissions from new, modified and reconstructed sources in the oil and gas industry.  The     so-called new source performance standards (NSPS) at 40 C.F.R. 60, Subpart OOOOa (Subpart OOOOa) have since become the subject of considerable debate and litigation.  Consistent with the Trump administration’s other deregulatory efforts, EPA published a proposal in the Federal Register on October 15, 2018 that aims to reduce the Subpart OOOOa regulatory burden for industry.  The agency has already received several comments from concerned citizens who oppose the proposal.  EPA will continue to accept stakeholder feedback through mid-December.
Significant Changes to Applicable Requirements
The 52-page rulemaking notice describes several proposed amendments to Subpart OOOOa.  EPA is addressing certain issues that were presented to the agency in formal petitions for reconsideration, as well as “other implementation issues and technical corrections” brought to the agency’s attention after Subpart OOOOa was promulgated.  For example, it is proposing significant changes to the requirements for fugitive emissions components, including revised leak monitoring frequencies.  Whereas the current regulation subjects well sites to semiannual leak monitoring, the revised Subpart OOOOa would require monitoring every other year for low production well sites and annually for all other well sites.  The required frequency of compressor station monitoring would be reduced from quarterly to either semiannual or annual. (The proposal includes distinct monitoring requirements for well sites and compressor stations on the Alaska North Slope.) EPA is also proposing to no longer require monitoring surveys at well sites once all major production and processing equipment is removed.  These are just a few of the many technical issues for which the agency is seeking public input.  …

November 1, 2018

Pennsylvania Supreme Court Rules on Injunctive Relief for the Marcellus Shale Coalition

Insitute for Energy Law Oil & Gas E-Report

(by Jean M. Mosites)

On June 1, 2018, the Pennsylvania Supreme Court largely affirmed and partially vacated a November 8, 2016 temporary injunction granted to the Marcellus Shale Coalition (MSC) in its challenge to several new regulations that had been promulgated by the Pennsylvania Environmental Quality Board on October 8, 2016.

MSC had filed a Petition for Review of limited sections of the new Chapter 78a Regulations on October 13, 2016, seeking expedited relief in the form of a temporary injunction of the challenged regulations pending review and resolution on the merits.

For the full article, click here.

November 1, 2018

Pennsylvania Supreme Court Reverses Approval of Gas Well Pad on Narrow Grounds, But Suggests that Municipalities May Permit Unconventional Natural Gas Drilling in any and all Zoning Districts

Institute for Energy Law Oil & Gas E-Report

(by Blaine A. Lucas)

Robinson Township Revisited

The parameters of Pennsylvania local government regulation of the oil and gas industry continue to be refined and left uncertain by the ongoing judicial fallout from the Pennsylvania Supreme Court’s 2013 decision in Robinson Township v. Commonwealth. In Robinson Township, the Court invalidated two sections of Pennsylvania’s updated  Oil and Gas Act (Act 13) limiting the authority of local governments to regulate oil and gas operations. The three-Justice plurality decision was based on a reinvigorated interpretation and application of the Article I, Section 27 the Pennsylvania Constitution, commonly known as the Environmental Rights Amendment (ERA), which states:

The people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment. Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people.

For the full article, click here.

October 30, 2018

Commonwealth Court Upholds Validity of Ordinance Allowing Shale Gas Drilling in All Zoning Districts

Energy Alert
(by Blaine A. Lucas and Robert Max Junker)
Court Refuses to Adopt a “One Size Fits All” Approach that Would Prohibit Municipalities from Permitting Shale Drilling in Rural Residential and Agricultural Zoning Districts
On October 26, 2018, the Pennsylvania Commonwealth Court published an en banc opinion in Frederick v. Allegheny Township Zoning Hearing Board, et al., No. 2295 C.D. 2015, 2018 WL 5303462 (Pa. Cmwlth. Oct. 26, 2018) rejecting a challenge to the validity of the Allegheny Township, Westmoreland County (Township) zoning ordinance.  The Court addressed the contention of oil and gas industry opponents that an unconventional natural gas well pad can only be permitted in an industrial zoning district.  After reviewing the detailed record developed in the substantive validity challenge decided by the Township Zoning Hearing Board (Board) and addressing recent Pennsylvania Supreme Court decisions on shale gas drilling, the Court, in a 5-2 decision, rejected this “one size fits all” proposition.  It found that state law empowers municipalities to determine where well sites are appropriate and compatible with other land uses within their boundaries.
Background
In 2010, the Township Board of Supervisors enacted a zoning ordinance amendment that allowed oil and gas well operations in all zoning districts as a use permitted “as of right,” provided the applicant satisfied numerous specified standards to protect the public health, safety, and welfare (2010 Ordinance).  A use permitted “as of right” requires administrative approval; it does not require public notice or a hearing.
In 2014, CNX Gas Company, LLC (CNX) applied to the Township for a zoning permit to develop an unconventional well pad (Porter Pad) in the R-2 Agricultural / Residential Zoning District and submitted all the information required by the 2010 Ordinance.  …

October 19, 2018

PHMSA finalizing new regulations for issuing emergency orders

The PIOGA Press

(by Keith J. Coyle)

The Pipeline and Hazardous Materials Safety Administration (PHMSA) is expected to finalize new regulations for issuing emergency orders in the coming weeks. The new regulations represent the culmination of a rulemaking process that PHMSA began two years ago during the final months of the Obama administration.

The Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016 (PIPES Act) gave PHMSA the authority to issue emergency orders if “an unsafe condition or practice, or a combination of unsafe conditions and practices, constitutes or is causing an imminent hazard[.]” 49 U.S.C. § 60117(o)(1). The PIPES Act directed PHMSA to establish temporary regulations for exercising that authority by no later than August 21, 2016, and final regulations by no later than March 19, 2017.

On October 14, 2016, PHMSA adopted temporary regulations for issuing emergency orders in an interim final rule. Federal agencies can adopt regulations in an interim final rule without providing the public with prior notice or the opportunity to comment, provided that good cause is shown under the Administrative Procedure Act. Stating the statutory deadline in the PIPES Act met the good cause standard, PHMSA established the temporary emergency order regulations as an interim final rule and provided a 60-day, post-publication comment period.

The temporary regulations set out the procedural requirements for issuing emergency orders and obtaining administrative review. Like the good cause exception in the Administrative Procedure Act, the PIPES Act authorizes PHMSA to issue an emergency order without providing prior notice or the opportunity for a hearing if an imminent hazard exists. PHMSA must consider certain factors before issuing an emergency order, and the order itself must contain specific information about the nature of the imminent hazard, the entities affected, the restrictions, prohibitions, or safety measures imposed, and the procedures for obtaining relief. …

October 2, 2018

Sixth Circuit Decisions Create Circuit Split on Clean Water Act’s Regulation of Discharges to Groundwater

Environmental Alert

(by Lisa M. Bruderly and Gary E. Steinbauer)

In two highly anticipated companion decisions, the U.S. Court of Appeals for the Sixth Circuit ruled that the Clean Water Act (CWA) does not extend liability to pollution that reaches surface waters through groundwater. The Sixth Circuit declined to join the Fourth and Ninth Circuits, which earlier this year held that the CWA regulates discharges of pollutants that reach “navigable waters” after traveling through hydrologically connected groundwater. The conflicting decisions arguably broaden the scope of the CWA’s National Pollutant Discharge Elimination System (NPDES) permitting program in the 14 states and 2 territories within the Fourth and Ninth Circuits and narrow the scope of the NPDES program in the four states within the Sixth Circuit. The Circuits’ disagreement on the scope of the CWA makes it even more likely that the Supreme Court will weigh in on this important issue.

Factual and Legal Background

On September 24, 2018, the Sixth Circuit issued a pair of decisions in two cases involving CWA citizen suits brought by environmental groups seeking to hold coal-fired utility companies liable for alleged unauthorized discharges from coal ash ponds or impoundments. Kentucky Waterways Alliance & Sierra Club v. Kentucky Utilities Co., No. 18-5115 (6th Cir. Sept. 24, 2018); Tennessee Clean Water Network v. Tennessee Valley Auth., No. 17-6155 (6th Cir. Sept. 24, 2018). The facts of each case are similar, even though they were appealed to the Sixth Circuit at different procedural stages. Unless specifically referred to in this Alert, we address these decisions collectively.

In Kentucky Waterways Alliance & Sierra Club v. Kentucky Utilities Company (KWA), the plaintiff environmental groups filed a CWA citizen suit against the owner of a coal-fired power plant for alleged violations of the CWA and the Resource Conservation and Recovery Act (RCRA). …

October 2, 2018

Podcast: Finding Value in Value Assurance Programs (VAPs)

DRI Toxic Torts and Environmental Law Committee

Attorney Alana E. Fortna interviews Christy McLean, a Managing Director of Alvarez & Marsal Dispute and Investigations, on the use of Value Assurance Programs (VAPs) in toxic tort and environmental matters in a Podcast for DRI’s Toxic Torts and Environmental Law Committee entitled “Finding Value in Value Assurance Programs.”  VAPs are a tool used to address neighborhood concerns over a potential drop in property market value due to environmental issues or alleged nuisances, such as an environmental accident, environmental contamination, increased noise from industrial operations, or concerns related to a landfill expansion.  VAPs are relevant to toxic tort matters, site remediation, environmental litigation, and disputes related to the installation of new industrial operations or the expansion of existing industrial operations.

For more information on how Babst Calland can assist in these areas, please see our Energy and Natural Resources, Environmental, Litigation, Public Sector, and Real Estate practices.

To listen to the podcast, click here.

   

 

September 27, 2018

New PHMSA Rulemaking Proceeding Targets Changes to Class Location Requirements

Pratt’s Energy Law Report
(by James Curry, Keith J. Coyle, and Brianne K. Kurdock)
The Pipeline and Hazardous Materials Safety Administration recently published an advance notice of proposed rulemaking asking for public comment on whether the Agency should change its class location requirements for gas pipeline facilities. The authors of this article discuss the class location requirements, the notice of proposed rulemaking, and what’s next.
The Pipeline and Hazardous Materials Safety Administration (“PHMSA” or the “Agency”) has published an advance notice of proposed rulemaking (“ANPRM”) in the Federal Register asking for public comment on whether the Agency should change its class location requirements for gas pipeline facilities. Specifically, PHMSA sought comment on alternatives to pipe replacements driven by class location changes. Adopted nearly five decades ago, PHMSA’s class location requirements use population density and surrounding land uses to categorize the potential risk that gas pipeline facilities pose to public safety.
OVERVIEW
The Agency asked the public to comment on whether the class location requirements should be updated to account for recent developments in the pipeline industry, particularly the widespread use of integrity management (“IM”) principles and new technologies. The current regulations require operators to reduce pressure, replace pipe, or conduct hydrostatic pressure testing in response to class location changes, and PHMSA is considering whether other alternatives should be available. Comments were due to the Agency on or before October 1, 2018.
The ANPRM is PHMSA’s first new pipeline safety rulemaking proceeding in the Trump era. The Agency began examining the need to modernize the class location regulations several years ago in response to a mandate that Congress included in the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, and PHMSA is framing the ANPRM as an extension of that earlier effort. …

September 25, 2018

Mobility In The Age Of Artificial Intelligence

PGHTECH FUSE

(by Justine Kasznica)

Mobility can be broadly defined as the movement of people, goods and information, and is consciously used here as a catchall term to describe a rapidly evolving ecosystem. Advancements in machine learning, artificial intelligence (AI), big data and connected systems (Internet of Things-IoT), applied against a backdrop of increased social and cultural acceptance of new technologies (such as autonomous systems, as well as enhanced capabilities of electric batteries and power/communications systems), as well as new economic models (such as the shared economy and Robot as a Services (RaaS) business models), have led to an unprecedented disruption of industries within the mobility ecosystem.

These industries range from automotive, rail, shipping, aviation industries to last-mile logistics and commercial space – essentially, any industry that builds or supports vehicles or systems that move on or through land, air, sea and space.

It is difficult to ignore the changing mobility landscape. For perspective, market forecasts predict that the IoT market alone will grow to $267 billion by 2020 and $640 Billion by 2022, and that as much as half of the IoT market will be attributable to spending on discrete manufacturing, transportation and logistics.

Despite these optimistic projections, full realization of the beneficial potential of this new era of mobility will be impossible unless industry participants give adequate priority and attention to critical policy issues related to system functionality/safety, data rights, security/rogue users, and product liability that, if left unaddressed, will become a barrier to widespread and sustainable adoption of these technologies. Specifically, industry participants should consider the following.

• System Functionality; Safety. “Is it safe?” This is the threshold question asked by those interacting with any autonomous or AI-enabled mobility technology. …

September 24, 2018

Pennsylvania court opens door to claims of trespass by fracking

TRENDS

(by Steven B. Silverman)

In the first decision of its kind, Pennsylvania’s intermediate appellate court has rejected the rule of capture in favor of recognizing trespass claims where hydraulic fracturing (fracking) extends to adjoining unleased lands. If the court’s decision stands, it could pave the way for a wave of trespass claims based on fracking, as well as changes to fracking operations themselves.

The dispute

In Briggs v. Southwestern Energy Production Co., 2018 Pa. Super. 79 (2018), the Briggs family owned an unleased, 11-acre parcel in Susquehanna County, in Pennsylvania’s far northeast corner. The parcel was adjacent to a parcel on which Southwestern Energy Production Company was undertaking fracking operations. The family claimed that Southwestern trespassed on their land through its fracking operations, resulting in the conversion of Briggs’ natural gas.

Southwestern countered that, as a matter of law, it could not be liable for trespass or conversion under the well settled rule of capture, which insulates operators who capture hydrocarbons draining from adjacent lands, even when those lands are not leased.

The trial court agreed with Southwestern, and the family appealed.

Rejecting the rule of capture

In rejecting Southwestern’s defense and overturning the trial court, the Superior Court of Pennsylvania held that the rule of capture did not apply to fracking of unconventional wells. The court opined that the rule was the product of geological practicality because, with historical conventional drilling, a pool of gas or oil will naturally flow to adjacent land. In contrast, with unconventional wells and shale gas, it is necessary for fracking to first reach the shale to release its hydrocarbons. Thus, the court held that the extension of that fracking to release the gas from the Briggs’s shale could be deemed a trespass. …

September 18, 2018

Fourth Circuit Rules that Coal Ash Ponds and Landfill are not “Point Sources” under the Clean Water Act

Environmental Alert

(by Lisa M. Bruderly and Gary E. Steinbauer)

Another three-judge panel of federal appellate judges has ruled on whether a National Pollutant Discharge Elimination System (NPDES) permit is required for pollutants in groundwater seepage that ultimately reach a water of the United States. Unlike the two other federal appellate court decisions issued earlier this year, this time the federal appellate court held that the Clean Water Act (CWA) did not regulate such discharges, finding that there was no “point source.”

On September 12, 2018, the U.S. Court of Appeals for the Fourth Circuit issued its decision in Sierra Club v. Virginia Electric Power Co. (VEPCO), holding that diffuse underground seepage from coal ash settling ponds and a landfill located at a closed coal-fired power plant are not regulated under the CWA. The VEPCO matter is one of several citizen suits filed by environmental groups across the country asserting novel theories of liability under the CWA. The Fourth Circuit in VEPCO was the first appellate court to address these theories with respect to coal ash ponds and landfills. The VEPCO decision is available at http://www.ca4.uscourts.gov/opinions/171895.P.pdf.

Factual and Legal Background

VEPCO involved inactive settling ponds and a landfill that were used to treat and store coal ash generated by an adjacent coal-fired power plant in Chesapeake, Virginia. VEPCO operated the settling ponds under a state-issued NPDES permit and the landfill under a state-issued Resource Conservation and Recovery Act (RCRA) permit. In 2002, groundwater samples collected from a series of monitoring wells installed pursuant to the RCRA permit showed elevated levels of arsenic in the groundwater and VEPCO implemented corrective action under a state-approved plan. …

September 18, 2018

Keith J. Coyle: Oppose the ban on pipeline construction A moratorium on pipeline construction will make Pennsylvania less safe

Pittsburgh Post-Gazette 

(by Keith J. Coyle)

A pipeline incident that occurred in Beaver County earlier this week is bringing increased attention to the issue of pipeline safety.  Many residents are concerned about the pipelines that pass by their homes, schools, and places of business.  Some are even going a step further and calling for a statewide moratorium on all pipeline construction.

I’ve spent the past decade working on pipeline safety issues as an attorney-advisor for the Pipeline and Hazardous Materials Safety Administration (PHMSA), a member of Governor Wolf’s Pipeline Infrastructure Task Force, and an attorney in private practice.

I understand the anxiety that people feel after a pipeline incident.  They want to know that their families are safe, and that the folks in charge are doing what is necessary to protect public safety.

Every incident serves as a reminder of the additional work that needs to be done to make pipelines safer.  But that does not mean that we should ignore the important role that pipelines play in improving our lives or disregard the efforts that are being made to build upon the industry’s strong safety record.

Pipelines are a critical part of the nation’s energy infrastructure. There are more than 2.7 million miles of pipelines in the United States, and Pennsylvania is home to approximately 91,000 miles of pipelines, according to the latest PHMSA data.

These lines carry the energy products that heat our homes, run power plants, provide fuel for transportation, and deliver the feedstock that is used to make countless consumer goods.

Pipelines are the safest and most reliable means of transporting energy products. The Frasier Institute, a Canadian-based research organization, found in a recent study that pipelines are 4.5 times safer than other comparable modes of energy transportation. …

September 18, 2018

Commonwealth Court invalidates portions of Chapter 78a regulations as unlawful

The PIOGA Press

(by Jean M. Mosites)

On August 23, the Commonwealth Court issued a unanimous opinion in The Marcellus Shale Coalition v. Department of Environ mental Protection and Environmental Quality Board, 573 M.D. 2016 invalidating portions of the new prepermit process created in 25 Pa. Code §§ 78a.1 and 78a.15(f) and (g), pertaining to new “public resources.” The Marcellus Shale Coalition (MSC) challenged the provisions as unlawful and unreasonable, seeking declaratory and injunctive relief.

There is no statutory right to judicial review of new regulations in Pennsylvania. Such challenges must proceed in the form of a declaratory judgment action in the Commonwealth Court or “as applied” in an appeal before the Environmental Hearing Board on a case-bycase basis. The latter course can be duplicative, lengthy and costly, offering only piecemeal relief. MSC challenged portions of the new Chapter 78a regulatory package through a declaratory judgment action in October 2016, seeking relief for its members from regulations beyond the scope of the Environmental Quality Board’s authority, regulations with high cost and little discernible benefit.

Count I of MSC’s Petition for Review challenged Sections 78a.15(f) and (g) and the related definitions contained in Section 78a.[1] of the Chapter 78a regulations. The provisions created a new pre-permitting process for well permit applicants, requiring new notice and comment opportunities in addition to those expressly authorized by Act 13, as adopted in 2012.

Following MSC’s Petition for Review, the Commonwealth Court preliminarily enjoined application of portions of the regulations on November 8, 2016.1 MSC filed an application for partial summary relief on Count I on August 31, 2017. Pending review of that application, the Pennsylvania Supreme Court affirmed the grant of preliminary injunctive relief as to Count I on June 1, 2018. …

August 31, 2018

Federal Court Enjoins West Virginia County from Using Zoning Laws to Interfere with Construction of Compressor Station

Energy Alert

(by Timothy M. Miller and Christopher B. (Kip) Power)

On August 29, 2018, the United States District Court for the Southern District of West Virginia issued a Memorandum Opinion and Order granting Mountain Valley Pipeline (MVP) summary judgment and permanently enjoining the County Commission of Fayette County, West Virginia, from using a zoning ordinance to bar construction of the Stallworth Compressor Station (CSS).  The CSS is a vital part of the 303.5-mile long, 42-inch diameter, MVP pipeline project stretching from Wetzel County, West Virginia, to Pittsylvania County, Virginia.  See Mountain Valley Pipeline v. Matthew D. Wender, et al., Case No. 2:17-cv-04377, Mem. Op. and Order (S.D. W. Va. August 29, 2018).

The CSS is being constructed on property owned by MVP in an area that is currently zoned Rural-Residential under the County’s Unified Development Code.  MVP sought approval for the limited re-zoning of the area to Heavy-Industrial, while also seeking a FERC certificate of authority for construction of the station.  FERC ultimately granted the certificate of authority during the re-zoning application process, but the County Commission nevertheless denied the re-zoning request.  Violations of the zoning ordinance exposed MVP to potential civil and criminal penalties.

The FERC approval process, as noted by the District Court, requires an applicant to make a bona fide attempt to comply with state and local authorities, but this “rule of reason” is secondary to FERC’s authority under the Natural Gas Act to preempt state and local authority over jurisdictional facilities authorized by FERC.

The Court dismissed the various theories relied upon by the County Commission and held  the zoning ordinance was unenforceable due to field and conflict preemption pursuant to the Supremacy Clause of the United States Constitution.  …

August 30, 2018

Under Secretary of Transportation for Policy Derek Kan joins Congressman Keith Rothfus to Meet with Local Transportation and Infrastructure Industry Professionals and Leaders

Babst Calland Facilitates Discussion Regarding Autonomous Vehicles Technology

On Friday, August 31st, The Department of Transportation’s Under Secretary of Transportation for Policy, Derek Kan, joins Congressman Keith Rothfus (PA-12) in Western Pennsylvania to discuss projects of regional importance, as well as emerging autonomous vehicle technology, with local leaders and professionals in the transportation and infrastructure sectors.

Justine Kasznica of Babst Calland’s Mobility, Transport and Safety practice will facilitate the roundtable discussion related to autonomous vehicles and drones among leading manufacturers, technology companies, and universities.

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